# Building materials and Natural gas Gas is the kiln and furnace fuel for tiles and glass, over 30% of ceramic input costs at Morbi in 2022, so a gas shock, such as the 2026 Hormuz disruption that shut most Morbi kilns for about six weeks, hits output and prices at once. Source page: https://www.materialinsights.org/links/building-materials-and-natural-gas/ [Building materials](https://www.materialinsights.org/industries/building_materials/) (industry) and [Natural gas](https://www.materialinsights.org/energy/natural_gas/) (energy): 4 relationships. ## How they are linked ### 1. Kiln and furnace fuel *Physical flow · Strong · Natural gas → building materials* Gas burns cleanly and gives the steady, controllable heat that tile kilns, glass furnaces and board dryers need; the site rates it 4 of 5 for float glass makers. - **4 of 5** criticality for float glass makers (furnace fuel) - **3 of 5** criticality for gypsum board, insulation and roofing makers - **8 million m³ a day** gas used by 710 Morbi units on piped gas, end of May 2026 Gas exposure in building materials sits mainly in tiles, sanitaryware, glass and board. Morbi, with more than 1,000 ceramic units in 2022, is Asia's largest ceramics cluster and the main concentration of gas use in Indian building materials. Enterprise types that depend on it: - Float glass makers: furnace fuel (criticality 4 of 5) - Gypsum board, insulation and roofing makers: drying and melting (criticality 3 of 5) - Brick, tile and sanitaryware makers: kiln fuel for tiles (criticality 2 of 5) Sources: [Material Insights](https://www.materialinsights.org/industries/building_materials/materials/); [Business Standard](https://www.business-standard.com/amp/article/economy-policy/largest-ceramic-manufacturing-cluster-bears-brunt-of-gas-price-hike-122031700011_1.html); [Ceramic World Web](https://ceramicworldweb.com/en/economics-and-markets/energy-shock-and-rising-costs-morbi-district-under-pressure) ### 2. Gas price into tile prices *Cost and price · Strong · Gas price → tile cost and price* Gas is a large share of ceramic units' input costs, so gas price rises are passed into tile prices within weeks when demand allows. - **over 30%** gas share of Morbi ceramic units' input costs, 2022 - **₹32 to ₹58 per scm** rise in gas price over six months to March 2022 - **25 to 40%** rise in Indian tile production costs after the 2026 energy shock In 2026 piped gas rose about 80% to around ₹75 per standard cubic metre, and producers raised prices 15 to 20% in May and a further 10 to 20% from 1 June. Pass-through depends on demand: when export or domestic demand is weak, units cut output instead. Sources: [Business Standard](https://www.business-standard.com/amp/article/economy-policy/largest-ceramic-manufacturing-cluster-bears-brunt-of-gas-price-hike-122031700011_1.html); [Ceramic World Web](https://ceramicworldweb.com/en/economics-and-markets/energy-shock-and-rising-costs-morbi-district-under-pressure) ### 3. Gulf LNG and propane *Shared risk · Strong · Strait of Hormuz → Indian kiln fuel* Morbi kilns were almost entirely dependent on propane and LNG shipped from the Persian Gulf, so a blockade of the Strait of Hormuz can cut fuel to the whole cluster at once. - **over 500** of nearly 800 active Morbi plants that shut their kilns, March to April 2026 - **15%** projected fall in Indian tile production and sales in 2026 The conflict that began on 28 February 2026 halted production for more than six weeks. A cluster that depends on one imported fuel route has little room to adjust, which is why output and exports fell together. Sources: [Ceramic World Web](https://ceramicworldweb.com/en/economics-and-markets/energy-shock-and-rising-costs-morbi-district-under-pressure) ### 4. Propane or piped gas *Substitution · Medium · Kilns switch between propane and piped gas* Many tile kilns can burn either propane or piped natural gas, so units move to whichever is cheaper or available. - **about double** propane price compared with February levels, 2026 - **710** Morbi units running on piped gas by the end of May 2026 When propane doubled in 2026, most kilns moved to piped gas even though it too was about 80% dearer. The switch limits supply risk but not price risk, because both fuels are imported and exposed to the same Gulf disruption. Sources: [Ceramic World Web](https://ceramicworldweb.com/en/economics-and-markets/energy-shock-and-rising-costs-morbi-district-under-pressure) ## For investors ### Key learnings 1. Gas is over 30% of ceramic input costs at Morbi, so tile makers' margins track gas prices closely. 2. A Gulf supply shock hits the cluster all at once: in March to April 2026 more than 500 of nearly 800 Morbi plants stopped their kilns. 3. Switching between propane and piped gas protects supply but not cost, since both rose sharply in 2026. ### What to track - **Piped gas price to Morbi industrial users**: Sets tile production cost (Monthly · Gujarat Gas) - **Spot LNG and Saudi propane prices**: Leads changes in kiln fuel costs (Weekly for LNG, monthly for propane · Platts, Saudi Aramco contract price) - **Indian tile output and exports**: Shows how much of the cost shock demand absorbs (Annual · industry associations, DGCI&S) ## For policymakers ### Key learnings 1. Morbi, Asia's largest ceramics cluster with more than 1,000 units, depends on imported gas and propane, which makes it a concentrated energy security exposure. 2. India's tile exports, 565 million m² worth about €2 billion in 2025, are sensitive to gas prices, so gas pricing for industrial clusters affects trade. 3. Diversifying LNG sources away from the Gulf and keeping fuel flexibility in kilns reduce the risk of whole-cluster shutdowns. ### What to track - **LNG imports by source country**: Shows dependence on Gulf supply through Hormuz (Monthly · PPAC) - **Gas allocation and pricing for city gas industrial users**: Affects cluster competitiveness (As issued · PNGRB, Ministry of Petroleum) ## India India made about 2,452 million m² of tiles in 2025 and exported 565 million m², mostly from the gas-fired Morbi cluster in Gujarat, where the 2026 Hormuz disruption shut most kilns for about six weeks. ## Sources 1. [Building materials: materials](https://www.materialinsights.org/industries/building_materials/materials/), Material Insights (2026) 2. [Largest ceramic manufacturing cluster bears brunt of gas price hike](https://www.business-standard.com/amp/article/economy-policy/largest-ceramic-manufacturing-cluster-bears-brunt-of-gas-price-hike-122031700011_1.html), Business Standard (2022) 3. [Energy shock and rising costs: the Morbi district under pressure](https://ceramicworldweb.com/en/economics-and-markets/energy-shock-and-rising-costs-morbi-district-under-pressure), Ceramic World Web (2026)